Total charitable impact

 

Money market reform to impact investment options

April 27, 2016

 

New rules by the Securities and Exchange Commission (SEC) have mandated to the financial industry that institutional investors of prime money market funds can no longer invest in retail prime money market funds. As an institutional client of The Vanguard Group, Vanguard Charitable is required to comply with the rule, effective on October 14, 2016.

To do so, Vanguard Charitable will exchange all assets invested in the Vanguard Prime Money Market Fund to the Vanguard Federal Money Market Fund. This exchange will occur on April 29 and affect accounts invested in Vanguard Charitable's Money Market and Gift Preservation investment options.

Vanguard Charitable accounts invested in Money Market or Gift Preservation will experience minimal changes in performance. Donors may notice that the Federal Money Market Fund has a slightly lower yield, reflecting the increased safety of the fund.
 

Investment option changes
Investment
allocation
Current underlying mutual fund(s) New underlying mutual fund(s)

Money Market
allocation
100% Vanguard Prime Money Market Fund 100% Vanguard Federal Money Market Fund

Gift Preservation
allocation
50% Vanguard Prime Money Market Fund
50% Short-Term Investment-Grade Fund
50% Vanguard Federal Money Market Fund
50% Short-Term Investment-Grade Fund

 


When choosing the new money market fund, Vanguard Charitable selected a fund most similar to the Vanguard Prime Money Market Fund to minimize the effect of this change on our donors. Several fund characteristics were considered including average duration, risk exposure, credit quality, average maturity, and maintaining a stable net asset value.

For more information on the Federal Money Market Fund, visit vanguard.com.

Donors who wish to reallocate the investment options of their philanthropic account may recommend an exchange at any time by accessing their account online. To register for online access or log in, please visit the log in page.

To learn more about the rulings, please visit sec.gov.


Vanguard Charitable was founded by The Vanguard Group, Inc. as an independent, nonprofit, public charity in 1997. Although Vanguard provides certain investment management and administrative services to Vanguard Charitable pursuant to a service agreement, Vanguard Charitable is not a program or activity of Vanguard. A majority of Vanguard Charitable's trustees are independent of Vanguard.